THE late Geoffrey Moore liked to tell this story from the time he was the head of the government’s Bureau of Labor Statistics in the early ’70s.

One day in July of 1971 a monthly employment report was delivered to the White House that wasn’t to President Richard Nixon’s liking. The President asked Moore, who had been Alan Greenspan‘s professor at Columbia University, to change the figures.

Moore adamantly refused. And from that day until the White House gladly accepted his resignation in 1973, Moore’s relationship with Nixon was understandably chilly.

Depending on how you look at it, the situation with the government’s statistics are either better these days, or worse.

Better because no politician – no matter how important or determined – would dare suggest such a blatant fraud like the one Nixon wanted to perpetrate on the American public.

But things are worse because government statisticians, armed with academic theories aplenty, are now able to massage employment and other government statistics so they suit politicians’ needs more than the public’s.

Over the next few columns I’ll explore some of the gimmicks being used as I seek to answer the following questions: Do Washington’s newfangled calculations give a true representation of what the economy is doing? Or, are we being bamboozled?

I’ll be upfront: I like a novel theory as much as the next guy, but ultimately I think we are being tricked.

In fact, I believe that the public in general and investors in particular are being badly misled into thinking that the economy is stronger and inflation is weaker than it really is.

The world financial markets clearly aren’t buying Washington’s story.

The incredible weakness of the dollar of late suggests that foreign investors believe there is more trouble in the U.S. economy than Washington is letting on.

In fact, foreigners may be exacting an unfair punishment on our currency because of these doubts.

And consumer confidence in this country has been declining steadily in a way that indicates Americans don’t believe an economic boom is at hand either.

For the record, I believe that when you shovel through the statistical trash our job situation and economy are growing moderately, while inflation is higher than being reported.

Since tomorrow is the day the Labor Department releases its monthly employment numbers, let’s look at those figures first.

Wall Street is expecting 200,000 new jobs to have been created in November. That would be an impressive gain, especially since it follows 337,000 new jobs in October.

In fact, October was the first month in 2004 that did not seem to benefit greatly from government assumptions – what I call sleight of hand – about jobs being created by new companies that are conveniently outside Washington’s statistics gathering system.

The government calls these assumptions – the Birth/Death Model.

For most of this year the monthly jobs figure relied heavily on whether or not Washington assumed a big contribution of jobs from these new, mystery companies.

October was the first month’s employment number that seemed to represent real, physically-counted jobs rather than assumptions.

If November also has good job growth that too, like October, will have to be because of the actual survey results and not guesswork.

In November, 2003 the government added just 62,000 phantom jobs and this year’s guesstimate for the month shouldn’t be much different.

Several of us discovered that the government was fudging the jobs figures more than a decade ago.

You’ll notice that the assumptions are now called the Birth/Death model. Previously, the government called it the “Bias Factor.”

It was different in that today’s assumptions allow for the government to reduce the job count when it thinks more companies are dying than being born – although this rarely happens.